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Friday 08 May, 2009

Jarvis Securities

Interim Results/Trading Updat

The following interim accounts have been filed with Companies House as required prior to the payment of the interim dividend on 22 May.

In addition, the Board are pleased to report that trading has increased significantly in April giving a new record month for deal volumes. This results in the following updated metrics to 30 April:

Daily average trade volumes +33% on 2008

Client cash balances +29% on 31 December 2008

New account openings +21% on the same period last year

Andrew Grant, chairman and chief executive, commented: 'Such a significant increase in trade volumes is encouraging and has continued into the start of this month. This upturn is reflected in both our retail and outsourced services businesses and prospects for this year look increasingly positive, despite the interest rate environment. I would also like to welcome those new shareholders that have joined us recently. I note that our reduced trading commission offer of £5.95 flat rate per trade for our clients that are also members of the Company has been well received, as I hope will be our first interim dividend for 2009 due to be paid shortly.'

Enquiries:

Jarvis Securities plc Tel: 0870 224 1111

Andrew Grant

Mathew Edmett

Arbuthnot Securities Tel: 020 7012 2000

Alasdair Younie

Katie Shelton

Notes:

Jarvis Securities plc is the holding company for Jarvis Investment Management plc (AIM: JIM.L) a stock broking company and outsourced service provider for bespoke tailored financial administration. Jarvis was established in 1984 and is a member of the London Stock Exchange; a broker dealer member of PLUS Markets, authorised and regulated by the Financial Services Authority and an HM Revenue & Customs approved ISA manager. Jarvis has more than 30,000 retail clients and a growing number of institutional clients. As well as normal retail broking Jarvis provides cost effective and flexible share trading facilities within ISA and SIPP wrappers.

CoMPANY income statement for the PERIOD ended 30 APRIL 2009

Four Months

Notes

Ended

30/4/09

£

Continuing operations:

Revenue

1,863,537

Administrative expenses

(146,985)

Finance costs

(87)

Profit before income tax

4

1,716,465

Income tax charge

5

(75,600)

Profit for the period

14

1,640,865

Attributable to equity holders of the company

1,640,865

CoMPANY balance sheet as at 30 APRIL 2009

Notes

30/4/09

£

Assets

Non-current assets

Property, plant and equipment

6

289,192

Intangible assets

7

93,844

Goodwill

7

548,715

Investments held to maturity

8

39,601

Available-for-sale investments

9

86,251

Investment in subsidiaries

10

262,732

Deferred income tax

3,143

1,323,478

Current assets

Trade and other receivables

11

665,643

Cash and cash equivalents

12

105

665,748

Total assets

1,989,226

Equity and liabilities

Capital and reserves

14

Share capital

13

105,000

Share premium

14

779,934

Capital redemption reserve

14

9,845

Revaluation reserve

14

85,152

Other reserves

14

59,539

Retained earnings

14

274,067

Own shares held in treasury

14

(83,319)

Total equity

14

1,230,218

Current liabilities

15

Trade and other payables

15

587,459

Income tax

15

171,549

Total liabilities

15

759,008

Total equity and liabilities

1,989,226

cashflow statement

for the PERIOD ended 30 APRIL 2009

30/4/09

£

Cash flow from operating activities

Profit before income tax

1,716,465

Depreciation and amortisation

51,344

Cost of share options

3,612

Finance costs

87

1,771,508

Decrease in trade and other receivables

1,176,866

(Decrease) in trade payables

(1,135,580)

Cash generated from operations

1,812,794

Interest paid

(87)

Net cash from operating activities

1,812,707

Cash flows from investing activities

Purchase of property, plant and equipment

(267,541)

Purchase of other long term assets

(149,700)

(417,241)

Cash flows from financing activities

Dividends paid

(1,393,345)

Net cash used in financing activities

(1,393,345)

Net increase in cash and cash equivalents

2,121

Cash and cash equivalents at the start of the period

(2,016)

Cash and cash equivalents at the end of the period

105

Notes forming part of the INTERIM financial statements

1. Basis of preparation

The company has adopted the requirements of International Financial Reporting Standards (IFRS) and IFRIC interpretations endorsed by the European Union (EU) and those parts of the Companies Act 1985 applicable to companies reporting under IFRS. The interim financial statements have been prepared under the historical cost convention as modified by the revaluation of available-for-sale financial assets, and financial assets and liabilities at fair value through profit or loss.

These interim financial statements have been prepared in accordance with the accounting policies set out below, which have been consistently applied. These accounting policies comply with applicable IFRS standards and IFRIC interpretations issued and effective at the time of preparing these statements.

The following IFRS standards, amendments and interpretations are effective for the company from 1 January 2009. The adoption of these standards, amendments and interpretations does not have a material impact on the company's profit for the period or equity:

The preparation of financial statements in accordance with IFRS requires the use of certain accounting estimates. It also requires management to exercise judgement in the process of applying the Company's accounting policies. The areas involving a high degree of judgement or complexity, or areas where the assumptions and estimates are significant to the consolidated financial statements are detailed in note 18.

2. Summary of significant accounting policies

(a) Revenue

Revenue represents net sales of services excluding value added tax.

(b) Property, plant and equipment

All property, plant and equipment is shown at cost less subsequent depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation is provided on cost in equal annual instalments over the lives of the assets at the following rates:

Leasehold improvement - 33% on cost

Motor vehicles - 15% on cost

Office equipment - -20% on cost

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the income statement. Impairment reviews of property, plant and equipment are undertaken if there are indications that the carrying values may not be recoverable or that the recoverable amounts may be less than the asset's carrying value.

(c) Intangible assets

Intangible assets are capitalised at their fair value on acquisition and carried at cost less accumulated amortisation. Amortisation is charged to administrative expenses within the income statement and provided on cost in equal annual instalments over the lives of the assets at the following rates:

Databases - 4% on cost

Software developments - 33% on cost

Website - 33% on cost

Impairment reviews of intangible assets are undertaken if there are indications that the carrying values may not be recoverable or that the recoverable amounts may be less than the asset's carrying value.

(d) Goodwill

Goodwill represents the excess of the fair value of the consideration given over the aggregate fair values of the net identifiable assets of the acquired trade and assets at the date of acquisition. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses.

(e) Deferred income tax

Deferred income tax is provided in full, using the liability method, on differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. The deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither accounting or taxable profit or loss. Deferred income tax is determined using tax rates that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries except where the timing or the reversal of the timing difference is controlled by the company and it is probable that the temporary differences will not reverse in the foreseeable future.

(f) Segmental reporting

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. The directors regard the operations of the company as a single segment.

(g) Operating leases and finance leases

Costs in respect of operating leases are charged on a straight line basis over the lease term in arriving at the profit before income tax. Where the company has entered into finance leases, the obligations to the lessor are shown as part of borrowings and the rights in the corresponding assets are treated in the same way as owned fixed assets. Leases are regarded as finance leases where their terms transfer to the lessee substantially all the benefits and burdens of ownership other than right to legal title.

(h) Finance lease interest

The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

(i) Investments

The company classifies its investments in the following categories: investments held to maturity, investments held for trading and available-for-sale investments. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and re-evaluates this designation at every reporting date.

Investments held to maturity

Investments held to maturity are stated at cost. An investment is classified in this category if acquired principally with the intention of holding indefinitely. Assets in this category are classified as non-current.

Investment held for trading

Investments held for trading are stated at fair value. An investment is classified in this category if acquired principally for the purpose of selling in the short term. Assets in this category are classified as current.

Available-for-sale investments

Available-for-sale investments are stated at fair value. They are included in non-current assets unless management intends to dispose of them within 12 months of the balance sheet date.

Purchases and sales of investments are recognised on the trade-date - the date on which the company commits to purchase or sell the asset. Investments are initially recognised at fair value. Investments are derecognised when the rights to receive cash flows from the investments have expired or been transferred and the company has transferred substantially all the risks and rewards of ownership. Realised and unrealised gains and losses arising from changes in fair value of investments held for trading are included in the income statement in the period in which they arise. Unrealised gains and losses arising in changes in the fair value of available-for-sale investments are recognised in equity. When investments classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in the income statement as gains and losses from investment securities.

The fair value of quoted investments is based on current bid prices. If the market for an investment is not active, the company establishes fair value by using valuation techniques. These include the use of recent arm's length transactions, reference to other instruments that are substantially the same, or discounted cash flow analysis refined to reflect the issuer's specific circumstances.

The company assesses at each balance sheet date whether there is objective evidence that an investment is impaired. In the case of investments classified as available-for-sale, a significant or prolonged decline in the fair value below its cost is considered in determining whether the security is impaired.

(j) Share Capital

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction from proceeds, net of income tax.

Where the company purchases its equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income tax), is deducted from equity attributable to the company's equity holders until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of any directly incremental transaction costs and the related income tax effects, is included in equity attributable to the company's equity holders.

(k) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

(l) Current income tax

Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid at the balance sheet date. They are calculated according to the tax rates and tax laws applicable to the fiscal periods to which they relate based on the taxable profit for the year.

(m) Dividend distribution

Dividend distribution to the company's shareholders is recognised as a liability in the company's financial statements in the period in which interim dividends are notified to shareholders and final dividends are approved by the company's shareholders.

3. Segmental information

All of the reported revenue and operational results for the period derive from the company's continuing operations.

4. Profit before income tax

30/4/09

Profit before income tax is stated after charging:

£

Directors' emoluments

4,000

Depreciation - owned assets

44,755

Amortisation

6,589

Operating lease rentals - land and buildings

21,167

Finance costs

87

Directors' emoluments

Fees

4,000

Details of the highest paid director are as follows:

Aggregate emoluments

4,000

Key personnel

The executive directors are considered to be the key management personnel of the company.

5. Income and deferred tax charges

30/4/2009

£

Based on the adjusted results for the period:

UK corporation tax

75,600

Total current income tax

75,600

6. Property, plant and equipment

Leasehold

Improvements

Motor

Vehicle

Office

Equipment

Total

Cost:

£

£

£

£

At 1 January 2008

56,212

27,057

214,314

297,583

Additions

284,561

36,601

54,363

375,525

Disposal

(52,431)

-

(31,570)

(84,001)

At 31 December 2008

288,342

63,658

237,107

589,107

Additions

-

-

661

661

At 30 April 2009

288,342

63,658

237,768

589,768

Depreciation:

At 1 January 2008

41,191

7,912

161,133

210,236

Charge for the year

77,006

9,092

29,583

115,681

On disposal

(42,438)

-

(27,658)

(70,096)

At 31 December 2008

75,759

17,004

163,058

255,821

Charge for the year

32,035

3,182

9,538

44,755

At 30 April 2009

107,794

20,186

172,596

300,576

Net Book Value:

At 30 April 2009

180,548

43,472

65,172

289,192

At 31 December 2008

212,583

46,654

74,049

333,286

7. Intangible assets and goodwill

Goodwill

Databases

Software

Development

Website

Total

£

£

£

£

£

Cost:

At 1 January 2008

342,872

25,000

93,521

70,185

531,578

Additions

-

-

972

18,884

19,856

At 31 December 2008

342,872

25,000

94,493

89,069

551,434

Additions

205,843

49,250

2,487

9,300

266,880

At 30 April 2009

548,715

74,250

96,980

98,369

818,314

Amortisation:

At 1 January 2008

-

4,427

89,379

56,415

150,221

Charge for the year

-

1,250

2,834

14,861

18,945

At 31 December 2008

-

5,677

92,213

71,276

169,166

Charge for the year

-

703

630

5,256

6,589

At 30 April 2009

-

6,380

92,843

76,532

175,755

Net Book Value:

At 30 April 2009

548,715

67,870

4,137

21,837

642,559

At 31 December 2008

342,872

19,323

2,280

17,793

382,268

In reviewing the value of goodwill for impairment, the directors have assumed an attrition rate of 7.0% based upon the actual rate for the previous period and a discount rate of 2.0%. The discounted cashflow is calculated over a period of 5 years. For impairment to the goodwill value to occur, the attrition rate would need to exceed 21.0% or the discount rate would need to exceed 11.3%.

8. Investments held to maturity

30/4/2009

Unlisted Investments:

£

Cost:

At 1 January 2009

39,601

As at 30 April 2009

39,601

Unlisted investments held to maturity are stated at cost.

Unlisted investments are interests held in the following company registered in the United Kingdom:

Shareholding

Holding

Business

Alexander David Securities Group plc

£39,601 at par

Loan notes

Stockbrokers

9. Available-for-sale investments

30/4/2009

Listed Investments:

£

Cost:

At 1 January 2009

57,500

On revaluation

28,751

As at 30 April 2009

86,251

Listed investments are stated at their market value at 30 April 2009.

Listed investments are interests held in the following company registered in the United Kingdom:

Shareholding

Holding

Business

Alexander David Securities Group plc

2.7%

11,500,096

1p Ordinary shares

Stockbrokers

10. Investments in subsidiaries

30/4/2009

Unlisted Investments:

£

Cost:

At 1 January 2009

111,204

Additions (capital contributions re share option costs)

1,828

Additions

149,700

As at 30 April 2009

262,732

Shareholding

Holding

Business

Jarvis Investment Management plc

100%

25,000,000

1p Ordinary shares

Financial administration

Dudley Road Nominees Limited*

100%

2

£1 Ordinary shares

Dormant nominee company

JIM Nominees Limited*

100%

1

£1 Ordinary shares

Dormant nominee company

Galleon Nominees Limited*

100%

2

£1 Ordinary shares

Dormant nominee company

Sharegain Limited*

100%

1

£1 Ordinary shares

Dormant company

* indirectly held

11. Trade and other receivables

30/4/2009

Amounts falling due within one year:

£

Trade receivables

95,696

Amounts owed by group undertakings

373,739

Other receivables

25,285

Prepayments and accrued income

170,923

665,643

12. Cash and cash equivalents

30/4/2009

£

Balance at bank and in hand

105

105

13. Share capital

30/4/2009

£

Authorised:

16,000,000 Ordinary shares of 1p each

160,000

Allotted, issued and fully paid:

10,500,000 (2007: 10,800,000) Ordinary shares of 1p each

105,000

A total of 600,000 options were granted to directors and employees on admission of the company to trading on AIM on 23 December 2004 and a further 50,000 to a director on 20 January 2007. These options were granted with an exercise price of 82.5p and are first exercisable on 23 December 2009 and with a last exercise date of 23 December 2014. In addition, 230,000 options were granted on 18 May 2007 to directors and employees with an exercise price of 175p and are first exercisable on 17 May 2012 and with a last exercise date of 17 May 2017. The total number of options currently unexercised and in issue is 820,000.

The following options were granted to directors and remain in issue:

at 82.5p

at 175p

A J Grant

273,500

76,500

M J Edmett

175,000

50,000

14. Capital and reserves

Share capital

Share premium

Capital redemption reserve

Revaluation reserve

Other reserves

Retained earnings

Own shares held in treasury

Total equity

£

£

£

£

£

£

£

£

At 1 January 2008

108,000

779,934

6,845

-

34,010

100,890

(1,930)

1,027,749

Profit for the financial year

-

-

-

-

-

675,285

-

675,285

Expense of employee options

-

-

-

-

20,089

-

-

20,089

Deferred tax charged to equity

-

-

-

-

-

(29,305)

-

(29,305)

Purchase of own shares

-

-

-

-

-

-

(842,962)

(842,962)

Cancellation of own shares

(3,000)

-

3,000

-

-

(720,323)

720,323

-

Sale of shares from treasury

-

-

-

-

-

-

41,250

41,250

Investment revaluation

-

-

-

56,401

-

-

-

56,401

At 31 December 2008

105,000

779,934

9,845

56,401

54,099

26,547

(83,319)

948,507

Profit for the period

-

-

-

-

-

1,640,865

-

1,640,865

Dividends paid

-

-

-

-

-

(1,393,345)

-

(1,393,345)

Expense of employee options

-

-

-

-

5,440

-

-

5,440

Investment revaluation

-

-

-

28,751

-

-

-

28,751

At 30 April 2009

105,000

779,934

9,845

85,152

59,539

274,067

(83,319)

1,230,218

Other reserves relates to the provision for the estimated cost of employee share options.

15. Trade and other payables

30/4/2009

Amounts falling due within one year:

£

Trade payables

21,276

Other provisions

566,183

Trade and other payables

587,459

Income tax

171,549

Total liabilities

759,008

16. Operating lease commitments

At 30 April 2009 the company was committed to making the following payments in respect of operating leases which expire:

30/4/2009

Land & buildings:

£

After more than five years:

597,959

On 26 September 2007 the company entered into a lease with Sion Holdings Limited, its parent company, for the rental of 78 Mount Ephraim, a self-contained office building. The lease has an annual rental of £63,500, being the market rate on an arm's length basis, and expires on 26 September 2017.

17. Financial Instruments

The company's principal financial instruments comprise cash, short terms borrowings and various items such as trade receivables, trade payables etc. that arise directly from operations. The main purpose of these financial instruments is the funding of the company's trading activities.

The main financial asset of the company is cash and cash equivalents which is denominated in sterling and which is detailed in note 12. The company also holds investments in equities and loan notes.

Short-term receivables and payables are excluded from these disclosures.

18. Critical accounting estimates and judgements

The company makes estimates and assumptions concerning the future. These estimates and judgements are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets within the next financial year relate to goodwill and the expense of employee options.

The company tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 2 (d). These calculations require the use of estimates. The assumptions and sensitivity relating to the impairment tests are detailed in note 7.

Employee options are expensed equally in each year from issue to the date of first exercise. The total cost is calculated on issue based on the Black Scholes method with a volatility rate of 30% and a risk free interest rate of 3.75%. It is assumed that all current employees with options will still qualify for the options at the exercise date.

19. Immediate and ultimate parent undertaking

The company's immediate and ultimate parent undertaking is Sionew Holdings Limited, a company registered in England and Wales. The largest set of accounts that Jarvis Securities plc is consolidated into is that of Sionew Holdings Limited. Sionew Holdings Limited is controlled by Mr A J Grant by virtue of his majority shareholding.

20. Related party transactions

Other receivables for the company include £5,000 due from Mr M J Edmett, a director of the company.

21. Event after the balance sheet date

An interim dividend for 2009 of 3p per Ordinary share was declared on 14 April 2009 and will be paid on 22 May 2009.

22. Capital commitments

The company had no capital commitments at 30 April 2009.

23. Fair value estimation

The fair value of financial instruments traded in active markets (such as trading and available for sale securities) is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the company is the current bid price.

The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values.

24. Financial risk management objectives and policies

The directors consider that their main risk management objective is to monitor and mitigate the key risks to the company, which are considered to be principally credit risk and liquidity risk. Several high-level procedures are already in place to enable all risks to be better controlled. These include detailed profit forecasts by business segment, monthly management accounts and comparisons against forecast, and regular meetings of the full Board of Directors.

The company's main credit risk is in respect of trade receivables. The company's policy is to monitor trade and other receivables and avoid significant concentrations of credit risk. Aged receivables reports are reviewed regularly and significant items brought to the attention of senior management.

The company aims to fund its expansion plans mainly from existing cash balances without making use of bank loans or overdraft facilities. Other risks are under constant review by the executive directors.

The directors do not consider that the company is materially exposed to foreign exchange risk or interest rate risk.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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